The Tribune

By Fay Simmons

Tribune Business Editor

jsimmons@tribunemedia.net

A senior hotelier says The Bahamas must deliver “value for money” to hit projected tourism growth levels after 100 percent light bill increases sparked fresh cost of doing business concerns.

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, speaking at the Prime Minister’s Office’s weekly press briefing, said that operating costs remain a key issue for hotel owners and operators in this jurisdiction.

He said: “Cost of doing business is always a major concern because there’s only so much you can charge a visitor in a particular destination, and I think that’s an opportunity that we have to work on, but it’s a collective bag.

“We have to look at cost of food, cost of imports, costs of goods and services, etc. At the end of the day, unless the visitor perceives the vacation as being value for money, we’re not going to see the levels of growth that we can see in the future.”

Mr Sands added that “electricity is the second largest expense” for most hotels, with some seeing their energy costs double - a 100 percent increase - due to Bahamas Power & Light’s (BPL) elevated fuel charge as it seeks to regain previous under-recovery because the full costs were not passed on to consumers.

“Reliable, consistent, cost-effective pricing in terms of electricity remains a significant challenge, particularly for hotels within the Family Islands,” he added. “This year was certainly an anomaly where many properties may have been hit with increases that represent 100 percent increases in their electricity costs at a minimum.

“The rates are coming down slowly. They have not increased this month, so we have to see what happens by the end of the year. Many hotels are latching on to the initiative to go towards renewable energy; different forms of electricity that will bring down the costs. Electricity is the second largest expense for most operations.”

Mr Sands added that The Bahamas’ operating costs are higher than for many rival Caribbean destinations which have diversified their economies and do not have to rely as heavily on imports.

He said: “The Bahamas is at somewhat of a disadvantage with some of our Caribbean partners whereby they’ve learned about our success in tourism, but also diversified their economies to have agriculture, industry and tourism.

“And therefore their costs are much better than the cost that we have here in New Providence. That is going to have to be an opportunity that we work on because we cannot continue to be perceived as an expensive destination, but perceived more of a destination that offers value for money going forward.”

The BHTA president said labour costs and productivity remain a “significant issue”, along with availability, as many persons have chosen to become entrepreneurs leading to a shortage of talent.

“Labour tends to be a significant issue in terms of getting the right type of talent to work in the hospitality business. In light of the fact that entrepreneurial opportunities have also escalated significantly, and therefore most persons tend to want their own businesses, which is good, that puts a strain on the ability to have a cadre of talent on an ongoing basis,” he added.

Mr Sands said that overall the Bahamas’ tourism sector is on a “good wicket’” and that the market for meetings, incentives, conferences and events (MICE) has increased.

He said: “The MICE market, which is meetings, incentives, conferences and expositions continues to grow. So you’re going to be seeing much more of that business in 2024. You’re also going to be seeing more collaboration in terms of special events that are taking place throughout various hotels in the islands that’s going to drive incremental business.

“You’re seeing much more diverse entertainment that’s also driving business. There’s no question that the cruise port opening and functioning is also driving a segment of the business. So, I think The Bahamas is on a very good wicket.”